U.S. home builders have reported that prospects for sales are the best they’ve been since the housing bubble burst five years ago, according to USA Today.
The National Association of Home Builders/Wells Fargo builder sentiment index that was released Wednesday rose from 35 points in July to 37. That is the highest reading yet since March 2007.
According to USA Today, the index is based on responses from 478 builders. Any reading below 50 indicates negative sentiment about the housing market. The index hasn't reached that level since April 2006, at the peak of the housing boom. But it has been trending higher since October and only dipped once since January. That suggests a turnaround in housing is stabilizing after years of stagnation.
Due to low mortgage rates and a decline in the amount of unsold homes, home builders have seen improved sales this year. Foreclosures have decreased as banks appear to be holding back from flooding the market with foreclosed properties. In June, builders saw the most new homes and apartments crop up in nearly four years. Permits to build single-family homes rose to the highest level since March 2010.
The housing recovery has experienced repeated bursts of activity in the past few years. In June, sales of new homes fell 8.4 percent to an adjusted annual rate of 350,000, the biggest decline since February 2011. Most economists say a healthy market has annual sales of new homes closer to 700,000.
There is no telling what will become of the housing market in the coming months if unemployment remains weak. Although it has grown a bit. With the addition of 73,000 jobs in April the economy grew 1.5 percent in the second quarter.
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